Arrest of Crown staff: China wants stiffer control over gaming in Macau

Crown staff were arrested in raids in Shanghai, Beijing, Guangzhou and Chengdu.

Billionaire James Packer says concerned over arrest of 18 Crown staff
Casinos are seen in a general view of Macau, China October 8, 2015. REUTERS

Australian billionaire James Packer said on Tuesday he is concerned about the 18 Crown Resorts employees detained in China for suspected "gambling crimes."

The three Australians under Chinese detention include Jason O'Connor, the head of international VIP gambling at Crown Resorts, in which Packer has a 53 percent stake.

"I am deeply concerned for the welfare of those Crown employees detained in China," Packer said in a statement.

The Australian casino giant confirmed on Monday the detention of 18 employees in China. Crown could not get in touch with the detained staff, but Reuters reported that Australia consular officials in Shanghai were trying to visit the Australians under detention.

China's foreign ministry said the arrests were made on the grounds of "suspected "gambling crimes" and that an investigation was underway.

Citing analysts, the news agency said Crown may have erred in calculating the risks while marketing its operations on the mainland, where gambling is illegal except for regulated state-sanctioned lotteries.

"Crown apparently either thought nothing to worry about, or they have only recently revived operations in (China). Whatever, they got it wrong," said David Green, an analyst at Newpage Consulting.

The Crown staff were arrested in raids in Shanghai, Beijing, Guangzhou and Chengdu. Crown shares nosedived following the report, wiping as much as $630 off Packer's wealth.

China has been increasingly cracking down on casino operations in Macau, where Crown has three casinos.

Last year, 13 South Korean casino managers were arrested for luring gamblers with free tours, free hotels and sexual services.

Casino gambling is legal in Macau, which is a specially administered region of China. However, analysts say Beijing has been trying enforce stiffer control over the casino operations there.

"The Chinese government seems to be making a clear statement about its view on gaming activity being offshored to foreign jurisdictions, while Macau is not being targeted in the same way," Vitaly Umansky, an analyst at Bernstein in Hong Kong, told Reuters.

The latest data showed gambling revenue in September in Macau was 18.4 billion patacas ($2.3 billion).